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Ontario has found “grounds for inspection” at a pay-for-plasma clinic Health Minister Deb Matthews is trying to close in downtown Toronto.

Matthews said Wednesday that observers from her ministry who were on the Adelaide St. premises for its Tuesday opening determined the fledgling operations of Canadian Plasma Resources warrant a closer look under the Laboratory and Specimen Collection Centre Licensing Act.

“They did find grounds for an inspection,” she told reporters at Queen’s Park.

The minority Liberal government maintains Canadian Plasma requires a licence under the law. The company, which plans to pay donors $25 for plasma that it will resell to drug companies to manufacture into blood products, says it has a legal opinion that it does not require such a permit.

Chief executive Barzin Bahardoust has told the Star that Canadian Plasma, which has invested $7 million to set up two clinics in Toronto and one in Hamilton — is not collecting lab specimens for analysis in the same manner as typical labs and is therefore not subject to the collection act.

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“We completely disagree. That’s what this investigation is about,” said Matthews, who has threatened to get a court order against Canadian Plasma to force it to cease operations in the province.

Matthews suggested it may take some time before that happens, following a full inspection of the clinic where about 15 nurses and lab technicians began training on Tuesday.

“We’ll take it from there, follow step-by-step, but they will not be operating in this province.”

On Wednesday afternoon, two ministry inspectors visited the clinic as staff were processing a potential donor and being trained with the plasmapheresis machine, which separates plasma from blood. They were hoping to see the donation process in action but while they were at the clinic there were no eligible donors, and so they left a short time later.

While the inspectors were there, Bahardoust reaffirmed to the Star that his company is acting “completely legally.”

After repeated discussions with the ministry, and legal experts, Bahardoust said, he doesn’t believe his company requires a licence under a provincial lab specimen and collection law.

He said he sought the legal advice of lawyer Gilbert Sharpe, the former long-time director of the legal branch of the Health Ministry.

“He gave us the legal opinion that what the ministry is saying is not legal,” said Bahardoust.

Bahardoust said he wished ministry inspectors had shown up prior to Tuesday and Wednesday, saying he repeatedly offered to address any questions and concerns over many months.

The government — which has faced criticism for not acting earlier given that Canadian Plasma’s plans have been public for some time — plans to introduce legislation Thursday that would make such payments illegal.

“I expect any company operating in Ontario, and especially in the health care sector, to operate within our laws,” Matthews said.

“You need to be licensed in Ontario to do the kind of work their business model calls on them to do. It is not an issue of payment now, because they are not paying people now, but it is an issue of whether or not they need a licence in the province of Ontario. We believe they do.”

Bahardoust has said his company will comply with any new laws and regulations, if necessary moving operations to another province such as Manitoba, where paying donors is permitted and where Cangene Corp. has been licenced for more than 30 years to make plasma products from paid donors with permission from Health Canada.

“Until that act is passed, the legal opinion we have is we don’t need a licence from the provincial government.”

Matthews said she is taking a firm stance because the Krever Commission into the tainted blood scandal two decades ago, in which 30,000 Canadians contracted HIV and hepatitis C from questionable blood supplies, recommended against paying donors.

“We went through a really difficult chapter in our national history with the tainted blood scandal . . . I feel it as a personal duty for me as health minister to follow the recommendations of Krever.”

Bahardoust criticized the minister's comments and actions saying, “they are in no way consistent with the Krever commission.”

“If she wanted to be consistent with the Krever commission she would have stopped or banned importing plasma products that are coming from paid donors in the United States,” he said.

Canadian Plasma is also waiting for Health Canada to rule on its application for a blood establishment licence, without which it can only collect plasma for research, not for use in pharmaceutical products.

Bahardoust said he hopes a decision on the application will come in “two or three months” from Health Canada, which held public consultations on it last year.

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